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Friday, July 31, 2009

Telesat HQ Likely to Remain In Ottawa Just Down the Street from Golf Course

The scientists and executives at global satellite services provider Telesat must like golfing because they certainly don't seem to appreciate recent Canadian satellite and business regulatory initiatives.

According to this July 23rd report on the website Tech Media Reports (a subscription news service focused on the Canadian communications industry), Telesat President and CEO Daniel Goldberg has indicated that the firm has no intention of pulling its Ottawa headquarters and research division out of Canada if the government introduces auctions for satellite orbital slots.

The report comes only one month month after this June 24th report from the same service which stated:

Telesat Canada warns it may leave Canada for countries with more hospitable regulations if Industry Canadamoves forward with a proposal to use auctions to assign future satellite orbital slots and spectrum.

The 40-year-old Ottawa company complains it already pays 10 times the amount for satellite spectrum licences than do its US counterparts.

These press releases seem to be essentially political posturing over Industry Canada's Gazette Notice DGRB-001-09 under the Department of Industry Radio Communication Act, published in April 2009, which seeks feedback on the possibility of using auctions to award licenses to operate Canadian satellite services.

The formal Telesat response, dated July 15th and signed by Mr. Goldberg, provides a more measured reply to the Gazette notice but also indicates that:

Telesat notes the unanimous opposition to satellite spectrum auctions from those representing the satellite industry. In addition to Telesat and the CSSIF (whose comments were endorsed by Telesat), the S1A and Ciel also expressed strong opposition to satellite spectrum auctions.

All commenting parties involved in the satellite industry cited the following reasons why auctions of satellite spectrum would be inappropriate:

Auctions are inconsistent with the international nature of satellite communications and international practice

Auctioning of satellite spectrum by Industry Canada could disadvantage Canadian operators and have a deleterious impact on the Canadian economy

Auctioning of satellite spectrum would not promote spectrum efficiency

Ciel has also pointed out that auctioning of satellite spectrum would be inconsistent with the Department's own Framework for Spectrum Auctions and that the paucity of potential bidders and the amount of satellite spectrum available are inconsistent with the economic arguments normally advanced to support spectrum auctions.

Both SLA and Ciel noted that diverting resources to auction fees would reduce those available for capital investment in the satellite networks themselves, ultimately reducing the benefits of satellite connectivity to the population as a whole.

Why is this debate even going on? That's simple: we're running out of orbits to launch satellites into.

With satellite operators around the world looking to gain an edge in terms of offering new services, access to real estate is vital. However, with most of the so-called hot orbital slots taken, what opportunities remain for satellite operators to develop new positions or make better use of the existing slots?

Industry Canada, fully aware of the problem has simply opened the debate as to the appropriate method to allocate the existing Canadian orbital slots, which are provided through the International Telecommunications Union (which officially allocates orbital slots to nations only and not directly to satellite operators or other private corporations).

Telesat, although unhappy with the idea of auctioning off Canadian orbital slots is aware that this is only an initial move in a long process and has decided that it's not yet prepared to move corporate headquarters somewhere else, at least until the final offer is tabled.

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